ZONAS FRANCAS Decree 2034/92 Establish a Free Zone in the district of Villa Constitución, province of Santa Fe.

Bs. As., 3/11/92;

VISTO Issue No. 7609/91 of the registration of the former SUBSECRETARIA DE HACIENDA, the provisions of Law No. 5142 and the proposed by the MINISTERY of ECONOMY AND ARTWS AND PUBLIC SERVICES, and

CONSIDERING:

That Law 5142 was promulgated in 1907, which, in its Article 1, paragraph 2, empowers the NATIONAL EXECUTIVE PODER to establish a free zone in a port of the Province of Santa Fe, where it deems it appropriate.

That in the context of the economic policy pursued by the National Government, mechanisms of reversal have been implemented that have had an impact on steel-metalurgical activity.

That in a substantial way, this measure has affected the socio-economic activity particularly located in the north of the Province of Buenos Aires and the south of the Province of Santa Fe.

That the NATIONAL EXECUTIVE PODER, sensitive to this reality, understands it necessary to promote activities that constitute real, economic and labour alternatives.

That under these circumstances, it is necessary and convenient to establish a free zone in the District of Villa Constitución, Province of Santa Fe.

That the measure is also supported by the fact that the free zone instrument remains valid, since the decrease in costs, associated with the activities that develop, extend to investment and employment.

That the instrument is convergent with foreign trade policy, which can contribute to its functioning, as in other countries, to the liberalization and growth of the economy

The need, at a first stage, to limit the activity of that zone free to the commercial aspect arises from the assessments, so that the impact on the activities carried out in the General Customs Territory can be measured.

That the granting of a commercial profile does not imply in any way the possibility of developing in it industrial activities for export, subject to what arises from a global policy on free zones that the NATIONAL EXECUTIVE PODER will define in a short term.

That the present decree is issued in exercise of the powers granted to the NATIONAL EXECUTIVE PODER by Article 86, paragraph 2, of the NATIONAL CONSTITUTION and Articles 1, 3 and 5, of Law 5142, and in accordance with the provisions of Articles 3, paragraph (b), 590 to 599 and 765 of the Customs Code (Act No. 22,415 and amendments).

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION

RIGHT:

Article 1 - For the purposes of this regulatory decree, the following shall be:

(a) Free Zone: This is the scope defined in Article 590 of the Customs Code.

(b) General Customs Territory: This is the scope defined in Article 2(2) of the Code.

(c) Special Customs Territory: This is the scope defined in Article 2 (3) of the same Code.

(d) Third countries or other countries: It is the geographical area that is subject to the sovereignty of other countries, including those that are constituted in favour of other States.

Art. 2nd . A Franca Zone is located in the District of Villa Constitución, province of Santa Fe, attentive to the provisions of article 1 of Law 5142, henceforth Zona Franca de Villa Constitución. Article 3. Please refer to the authority for the application of this regime to incorporate gradually and in stages, according to what the Governing and Exploitation Body of the Free Zone of Villa Constitución proposes, the successive authorizations of the same within the area of expansion that the authority of application is appropriately established.

The Implementation Authority shall have SESENTA (60) days to be issued in this respect; the requested period shall be final.

Article 4. The Organ of Administration and Exploitation, for the location of the Zona Franca de Villa Constitución, will proceed to convene a public contest of predios. Art. 5o For the purposes set out in the preceding article, the offerors should basically consider the following alternatives of offers:

(a) Location of the property;

(b) Sale;

(c) Poisoning, or;

(d) Right to use of the property.

Art. 6°... The Authority of Application, at the time of awarding the concession of exploitation of the Zona Franca de Villa Constitución, shall proceed to establish the catastral location of it, both for the initial area and the area of expansion, as set out in articles 3° and 4° of this decree. Art. 7°... The concessionaire shall compensate the national State for the expenses arising from the fulfilment of article 4 of the present decree.

The concessionaire shall have the right to use the predio, for all the time of the award of the exploitation.

Art. 8°... The hours and places of entry and departure of the Franca Zone of Villa Constitución shall be determined by the Organ of Administration and Exploitation in accordance with the regulations it dictates. Art. 9th... It is prohibited to inhabit temporarily or permanently within the Franca Zone of Villa Constitución. Art. 10. ! The area declared Zona Franca de Villa Constitución will be fenced within its limits in order to guarantee its isolation from the General Customs Territory. Art. 11. ! The entry of persons and/or goods by places other than those authorized is prohibited. Art. 12. ! The application authority will be the MINISTERY OF ECONOMY AND PUBLIC ARTWS AND SERVICES, through the Secretariat of Industry and Commerce. Art. 13. ! The other agencies involved with competence in the operations of the Zona Franca de Villa Constitución shall make the supplementary provisions. Art. 14. ! The NATIONAL ADMINISTRATION OF ADUANAS shall issue the relevant regulations, in order to facilitate and simplify customs procedures linked to the present. Art. 15. ! The exploitation of the Zona Franca de Villa Constitución will be private or mixed. The necessary infrastructure works will be carried out by the concessionaire of the Zona Franca de Villa Constitución. Art. 16. ! The exploitation will be offered in concession and by public tender which will conform to the conditions established by the Governing and Exploitation Body in the Operating Regulations of the Free Zone of Villa Constitución. The tendering and awarding of the concession shall be approved by the application authority, in a term not exceeding SESENTA (60) days. Art. 17. ! Invite the province of Santa Fe to form a public body in the orbit of the PROVINCIAL EXECUTIVE PODER, contemplating in its integration the participation of representatives of the same and the municipality of Villa Constitución, destined for the administration and exploitation of the Franca Zone that is established in the present. Art. 18. ! The Governing and Exploitation Body should basically have the following functions:

(a) Elaborate the Operating Regulations and elevate it for consideration to the implementing authority.

After TREINTA (30) days of its elevation, except resolution on the contrary, the approval of the same will be firm. Such regulations shall contain the time limit, modality and conditions for the granting of the exploitation of the Franca Zone of Villa Constitución as well as the terms and contractual conditions for the admission of the users.

(b) Manage the Free Zone of Villa Constitución.

(c) To evaluate technically and economically the projects submitted by candidates for the exploitation of the Free Zone of Villa Constitución.

(d) Adjudicate the granting of exploitation of the Zona Franca de Villa Constitución with approval of the authority of implementation, and supervise the execution of the project and the operation.

(e) Fiscalize compliance with the obligations of the concessionaire in charge of the exploitation.

(f) Serve the enforcement authority as a permanent advisory and consultation body on the activities of the Free Zone of Villa Constitución.

(g) Evaluate the regional impact of the Franca Zone of Villa Constitución and articulate its operation with the regional plans of the municipalities and the provincial plans.

(h) Refer to any information required by the enforcement authority.

Art. 19. ! The Governing and Exploitation Body will promote free participation in the provision of services within the Free Zone of Villa Constitución. Art. 20. ! The concessionaires shall:

(a) Perform infrastructure works in the Franca de Villa Constitución Area that are necessary for its normal functioning, which are part of the project approved by the Governing and Exploitation Body, and the authority for implementation.

(b) Promote and facilitate the development of operations, negotiations and activities in the Franca Zone of Villa Constitución.

(c) Urbanize, project and build buildings for the various activities permitted in the Franca Zone of Villa Constitución.

(d) Rent lots for the construction of buildings for the different activities. The use of the entire area of the Zona Franca de Villa Constitución can not be granted to a single user.

(e) To conclude contracts necessary for the fulfilment of their obligations.

(f) Dictate and modify its own Internal Operating Regulations in accordance with existing legislation and regulations.

(g) Ensure the provision of water, light, gas, telecommunications, driving force, heat, refrigeration or any other kind of services required for the operations of the Franca Zone of Villa Constitución in accordance with the provisions of art. 19 of this decree.

(h) To comply with and enforce the operating regulations. The dealer will be jointly responsible with the users who transgress it.

Art. 21. ! In order to ensure the provisions of articles 19 and 20, subparagraph (g), the enforcement authority, at the time of NOVENTA (90) days of the decree, shall propose to the NATIONAL EXECUTIVE PODER, the measures necessary to establish the deregulation of public and/or private services, provided in the Franca Zone of Villa Constitución. Art. 22. ! The dealer/s can build buildings and rental facilities in the Franca Zone of Villa Constitución. Art. 23. ! Users of the Franca Zone of Villa Constitución shall constitute a legal person or bear separate accounting of other companies installed in the General or Special Customs Territory. Art. 24. ! In the Franca Zone of Villa Constitución the goods may be the subject of the operations necessary to ensure their conservation, and of the ordinary manipulations aimed at improving their presentation or their commercial quality or to condition them for transport, such as division or gathering of packages, formation of lots, classification and change of packaging. The merchandise can also be transferred.

The enforcement authority at a later stage, and in accordance with the legislation, may authorize industrial activities for export.

Art. 25. ! The operations in the Free Zone of Villa Constitución will not be subject to economic restrictions or deposits prior to international trade operations. Art. 26. ! The entire tax and customs provisions, including those of a repressive nature, shall be applicable to the Franca Zone of Villa Constitución, with the exceptions set out herein.

La SECRETARIAT OF PUBLIC INCOME, at the end of NOVENTA (90) days of this decree, will propose to the NATIONAL EXECUTIVE PODER the necessary measures for the granting of exemptions or degravations of the taxes that encumber the basic services provided within the Free Zone of Villa Constitución.

It must also establish in the same time period, the tax regime to apply to activities within the Franca Zone of Villa Constitución.

Art. 27. ! The introduction to the Free Trade Zone even if it comes from the General or Special Customs Territory, will be considered as an import. Art. 28. ! The extraction of the Free Trade Zone even for the General or Special Customs Territory shall be considered as if it were export. Art. 29. ! Explain the payment of the Statistical Rate to those goods entering the Free Zone of Villa Constitución from another country. Art. 30. ! Export stimuli corresponding to exports from the General or Special Customs Territory to the Free Zone shall be liquidated once the goods were extracted from that area to another country and within the time limit for this purpose they set out the general rules governing the matter, whether in the state it possessed when it entered the area, or in another. Art. 31. ! Exports from the Free Zone to third countries will benefit from the return of effectively paid taxes, where they correspond to passive tax returns to exporters from the General Customs Territory. Art. 32. ! Exports from the Zona Franca de Villa Constitución do not enjoy other incentives that correspond to exports from the rest of the country except those derived from international agreements signed by the Argentine Republic. Art. 33. ! All kinds of goods and services may be introduced in the Franca Zone of Villa Constitución, whether or not they are included in permitted import lists, created or created, with the sole exception of species that affect public morals, plant or animal health, public safety, the preservation of the environment, flora and fauna and those situations contemplated in specific legislation. Art. 34. ! Temporary import regimes in force in the General Customs Territory shall apply to operations under such destination from or to the Franca Zone of Villa Constitución. Art. 35. ! Contact, post, give to the National Directorate of the Official Register and archvese. MENEM ! Domingo F. Cavallo ! José L. Manzano